Once the amounts of the service department allocations have been determined, a j
ID: 2539091 • Letter: O
Question
Once the amounts of the service department allocations have been determined, a journal entry should be prepared to record the distributions, the result of which is: 1.debit balances in the Factory Overhead accounts of the production departments for which the total agrees to the total amount of factory overhead incurred. 2.credit balances in the Factory Overhead accounts of the production departments for which the total agrees to the total amount of factory overhead incurred. 3.debit balances in the Factory Overhead accounts of the service departments for which the total agrees to the total amount of factory overhead incurred. 4.credit balances in the Factory Overhead accounts of the service departments for which the total agrees to the total amount of factory overhead incurred.
Explanation / Answer
Answer : "3. debit balances in the Factory Overhead accounts of the service departments for which the total agrees to the total amount of factory overhead incurred."
=> Once the allocations rate of the service departments have been determined, journal entries are made to the Factory Overhead accounts of the service departments to Factory Overhead accounts of each of the production departments.
The allocation made the distribution of factory overhead to Work in Process through the use of pre-determined rates of each of service department.
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